California's elderly will be healthier and more productive, says new report
30 January 2003

By Carol Hyman, Media Relations

Berkeley - In 2050, the elderly population in California will be healthier, better educated, more diverse and three times the size of the over-65 population in the state today, according to a new report prepared for state legislators by the California Policy Research Center, a University of California program.

And while the ratio of seniors to working age individuals is expected to double by then, there will be little impact on the state budget, as the elderly as a group pay slightly more in taxes than they cost in benefits.

The report, "The Growth and Aging of California's Population: Demographic and Fiscal Projections, Characteristics and Service Needs," details the current status of California's senior citizens and projects the demography, assistance needs and fiscal impact of that population.

Among the report's findings were reasons to be optimistic about the lives of California seniors over the next 50 years:

Although California seniors will be increasingly both foreign-born and Hispanic, language barriers are not expected to worsen. In fact, the state's elderly population is predicted to be multilingual. Foreign-born seniors will increasingly be long-term residents who are likely to be contributors to the state's fiscal health, as opposed to recent arrivals who tend to require more assistance.

California seniors receive more income, on average, and are better educated than their counterparts in the rest of the country, and it is likely that seniors in the future will attain even higher levels of education.

Seniors are more likely to be working than seniors in other states, and their poverty rates, which currently are lower than the national average, are not likely to increase.

The percentage of seniors with disabilities is projected to decline at each age, but disabled seniors as a share of the total state population are likely to increase as the population grows older.

The need for nursing home beds will roughly double in 2050. Still, the vast majority of California's seniors will continue to live on their own, and the number of households in California will also double in 2050.

Those aged 85 and over make up only one-ninth of the current population over 65, but that share is projected nearly to double by 2050.

A critical component of the impact of aging on future state spending is the rate of growth in per-capita health care costs. If past trends continue, by 2050, Medi-Cal spending could easily double relative to California's economy.

The report projects that population aging will have little effect on state expenditures relative to state income. Although health care costs are rising rapidly here as elsewhere, improving health of seniors and declining rates of nursing home utilization should help keep costs down.

Also, young Californians are very costly to the state, and their share of the state's population will probably decline. Although the best guess is that expenditures will stay about the same relative to state income, there is a five percent chance that they will decline by at least 40 percent or rise by at least 60 percent relative to their current share.

The researchers formulated their projections by fitting statistical models to historical data, and then simulating thousands of partially random alternative futures based on these models.

"We look for structural patterns in the past," said Ronald Lee, a UC Berkeley professor of demography and economics, "and then relative to those patterns, we measure the amount of unexpected changes."

Lee, who also is director of UC Berkeley's Center for the Economics and Demography of Aging, co-authored the report with Timothy Miller, a research associate at the California Policy Research Center; and Ryan Douglas Edwards, a postdoctoral scholar at the Department of Biological Sciences and the Morrison Institute for Population and Resource Studies at Stanford University.

Andrew Scharlach, UC Berkeley professor of social welfare and chair of a faculty work group that helped guide the project, believes the report has some positive implications, and that it can serve as a reminder of the value of senior citizens.

"The state has an opportunity to be proactive to develop a plan to embrace changes in California's population," he said. "We need to see older adults as a resource-as a population who is healthy, better educated and full participants in society. We have people with a lifetime of experience and a lot to offer."